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Some of the Public Services 

of 

Honorable Vhilander Chase Knox 



SPEECH 

of 

Hon. James Francis Burkk 

before the 

Pennsylvania Delegation 
in Congress 

on 

Wednesday, December 4, 1907 

and 

Suggestions respecting legislation made to Con 

gress upon invitation of Senator Hoar 

and Representative Littlefield 

by Mr. Knox 



Some of the Public Services 

of 

Honorable "Philander Chase Knox 



SPEECH 

of 

Hon. James Francis Burke 

before the 

Pennsylvania Delegation 
in Congress 

on 

Wednesday, December 4, 1907 

and 

Suggestions respecting legislation made to Con- 
gress upon invitation of Senator Hoar 
and Representative Littleneld 
by Mr. Knox 






Gentlemen of the Pennsylvania Delegation' 

Theodore Roosevelt, than whom no man living has had 
wider opportunities of observation or greater ability to ac 
curately appreciate and correctly describe the characti 
man needed in the solution of the many perplexing pn 
that confront "in- people, never coined more c nvincing and 
conclusive sentences than when in a public speech he de- 
scribed the Honorable Philander Chase ECnox to the pi 
of the United States in these words: 

"As we face these infinitely difficult problems, l< 
keep in mind that though we need the highest qualities 
of the intellect in order to work out proper schemes 

for their solution, yet we need a thousand times more, 

what counts for many, many times as much as intellect 
— we need character. 

"We need common sense, common honesty and reso- 
lute courage. We need what Mr. Knox has si: 
the character that will refuse to he hurried into any 
unwise or precipitate movement by any clamor, whether 
hysterical or demagogic, and on the other hand, the 
character that will refuse to he frightened "in of a 
movement by any pressure, still le>> by any threat, i 
press or implied." 

Worthy of Every Word. 

In the light of presenl needs these words seem to bear 
the very impress of inspiration. Yet, however appropriate 

the time, however apt the description, however great the 



President," however generous the impulse of him who uttered 
them or gratifying to the friends of the great Pennsylva- 
nian of whom he spoke, we find the striking force and su- 
preme felicity of it all in the fact that it was but one of 
many expressions of a kindred character which the Chief 
Magistrate of the Nation has found it proper to make re- 
garding the achievements of the most helpful companion he 
has known in the greatest crusade that was ever waged 
against evils organized and existing in the name and under 
the forms of law. 

Ambitious that these great problems should be perma- 
nently solved and that these great policies of our great Pres- 
ident should be perpetuated, the Pennsylvania delegation on 
a former occasion similar to the present, suggested Penn- 
sylvania's favorite son as the logical successor of Theodore 
Roosevelt as President of the United States. 

Loyalty of His Native State. 

The substantial and thoughtful approval with which the 
proposal was met in all sections of the country was repeated 
and enlarged upon when the Pennsylvania Republican State 
convention, composed of delegates elected for the first time 
under the law by a direct vote of the people, unanimously 
endorsed our candidate for the Chief Magistracy of the 
Nation. 

By way of ratification and furnishing additional evidences 
of the genuine enthusiasm and absolute unanimity of senti- 



ment back of this great proposition, the Republican State 
I .eague, the Republican ( '< iunty and < lity ( "< immittees, and in 
fact all branches < >f the party thr< >ugh< >ut the t '■ >mmi >nvi 
have since endorsed the little giant whom every proud and 
patriotic Pennsylvania!! hopes and believes will be the next 
I 'resident of the I United State 

E \K\ ES IN ESS I '1 EX PR] 

While we believe that there is not a single section of the 
Union that is nol rich enough in tradition, powerful enough 

in interest and patriotic enough in purpose to justify it in 
making a legitimate efforl to name the next President of the 
United States, yet we hold that the pride of states and the 
politics of sections are secondary matters in affairs of such 
vital concern to the whole people. 

Main Consideration The Max. 

The main consideration should be the man. The wrong 
man can not live in the right state and the right man can not 
live in the wrong- state when it comes to choosing the Presi- 
dent of a Republic composed of all the state-. 

The evils of sustaining geographic lines and sectional 
prejudices in American pi litics are so manifold and SO mani- 
fest that every citizen whose patriotism is broad enough to 
embrace the Union is opposed to the unhealthy doctrine that 
permits the doubts or certainties of local situations to domi- 
nate 85,000,000 people in the choice of their Chief Execu- 
tive. 



Provincialism has no place in the Presidential politics of 
this Republic. 

Era of Great Problems. 

This epoch is crowded with vital problems and great un- 
dertakings, and fraught with more than the ordinary re- 
sponsibilities that attach to public office and the performance 
of public duties. 

Only the trained warrior against existing evils and the 
trusted conservator of constitutional rights should be al- 
lowed on guard by the American people. 

Never before were they less inclined to experiment in 
manning the ship of state. 

In the domain of public duty new pathways have been 
blazed ; new light has been shed upon constitutional prob- 
lems, a more exacting public spirit has succeeded, and more 
critical responsibilities than ever confront the public ser- 
vants of the present and the future. 

Only Tried Material Wanted. 
To the discharge of these responsibilities the people will 
insist upon calling the most capable minds and the most 
courageous characters in the arena of American public ser- 
vice, and, with supreme confidence in her ability to produce 
the man who, in a greater measure than any other living 
American, possesses the attributes that should make him the 
worthy successor of 1 neodore Roosevelt, the Keystone State 



7 

has presented to the nation the man wln> in Cabinel 
Senate has proven his unquestioned capacity to rank with 
the greatest statesmen of his day. 

Words From iiik White Hoi 

In support of this assertion I might quote a portion of 
the letter made public at the White House when the P 
dent gave reluctant consent to the resignation of his faithful 
friend and wise counsellor who had been called to a seat in 
the Senate of the United States. 

"My dear Mr. Knox: 

"* * * To your high professional qualifications 

yon have added unflagging zeal and an entire indiffer- 
ence to every consideration save the honor and interest 
of the people at large. Many great and able men have 
preceded yon in the office yon hold, but there is none 
among them whose administration has left so deep a 
mark for good upon the country's development. 

"Under yon it has been literally true that the mighti- 
est and humblest in the land have alike had it brought 
home to them, that each was sine of the law's protec- 
tion while he did right, and that neither c« m!< 1 hope t,, 
(\v\v the law if he did wrong. In what yon have done 
you have given probf not merely of the profound learn- 
ing of the jurist, but of the hold initiative and wide 
grasp of the statesman. You have deeply affected for 
good the development of our entire political system in 
its relations to the industrial and economic tendencies 
of the time. 

"For all von have done I thank you most earnestly, 



not only on my own behalf, but on behalf of the 
public whom you have served with such single-minded 
devotion." 

And now that we may ascertain some of the acts that 
afforded a foundation for the President's splendid tribute, 
let us glance for a moment over the record of the man of 
whom he wrote in terms of a character such as he has never 
written of any other living American. 

During the last few years the disclosure of evils has been 
so widespread, the application of remedies has been so rapid 
and cures in many instances have been so complete in mat- 
ters of the most vital importance to the welfare of the 
people and the preservation of the fundamental purposes 
of our government, that we are apt to lose sight of both 
methods and men in the bewildering swiftness of the trans- 
formation. 

Central Figures in Contest. 

. While through it all the central, commanding figure in 
the crusade was a brave and brilliant President, as the strug- 
gles practically all involved the rehabilitation and enforce- 
ment of old, and the framing and enactment of new laws, 
the arm upon which he rested, the mind upon which he 
most relied was that of his trusted personal friend and great 
Attorney-General, who with unflinching courage and uner- 
ring clearness pointed out the pathways over which the 
journey must be made if the eternal principles of justice 



were to prevail in the obliteration of greal evils and the 
elevation of the functions of the Federal Government al 
the atmosphere of doubt. 

ClIAM PIONS IN THE I lONFl : 

The extensive and startling growth of combinations deal- 
ing in the necessaries of life and engaged in interstate com-! 
merce, accompanied by a bold defiance of Federal authority, 
crystalized in 1902 in a conflict between two schools of 

thought, one led by arrogant combinations of capital and 
the other led by Theodore Roosevelt and Philander Chase 
Knox representing the American pe pie. 

As if encouraged one by the other, in a single year the 
large grain dealers and beef packers of the Middle West en- 
tered into illegal arrangements with the railroads for re- 
bates and discriminating advantages in transportation, which 
gave them a complete monopoly of a business formerly en- 
joyed by a large number of person- 1 ver a wide area of ter- 
ritory, and still bolder in conception and broader in purp >se 
than all previous attempts at crushing competition came 
the organization of the Northern Securities Company, the 
success of which meant the permanent throttling of trade 
in the great Northwest, and the ultimate control of all the 
great railroad lines of the country by combinations before 
which every shipper would be helpless, and the govern- 
ment itself powerless to promote the thrift or protect the 
interests of its people. 



10 



Blazing New Pathways. 

The supreme test of the right and the efficiency of the 
Federal government to crush this great evil immediately 
followed. Prompt action became necessary along new and 
untried lines, and upon a theory of the Constitution and ex- 
isting laws more comprehensive and courageous than any 
interpretation that had ever before been attempted in the 
actual administration of our system of jurisprudence. 

Attorney-General Knox advised the President that the 
plenary power of Congress over all kinds of transportation 
and its instrumentalities had not been exhausted by the 
Sherman Act, nor by the Interstate Commerce Act; that in 
his opinion the Sherman Act did reach the Northern Secur- 
ities situation, and that immediate steps should be taken to 
secure interpretations of all existing laws, with a view to 
confirming the theory of the completeness of the power of 
the Federal government in its application to the situation, 
and as a guide for new legislation. 

For the purpose of at once allaying the apprehension of 
the millions of thrifty Americans interested in seeing these 
gigantic evils stricken down in their early growth, the At- 
torney-General in a speech before the Pittsburg Chamber of 
Commerce, on October 14, 1902, elaborated upon what was 
to be the attitude of the administration in the crisis that had 
developed. 



11 



Epoch m iking Speech. 

The keynote of thai speech was the great underlying prin- 
ciple upon which rested the successful 5tm ainsl dis- 
crimination, that followed. 

Language could nol be more hind than that in which 
Mr. Kno\ described the necessary remedy. He said: 

"Corporations serving the public as carriers and in 
similar capacities should be compelled to keep thi 
nues of commerce free and open to all upon the same 
terms and to observe the law as to its injunctions 
against stifling competition. Moreover, corporations 
upon which the people depend for the necessarii 
life should be required to conduct their business 
regularly and reasonably to supply the public 
needs. * * * 

"If these serious evils were eradicated and a higher 
measure of administrative responsibility required in 
corporate officers, a long step would he taken toward 
allaying the reasonable apprehension that the unchecked 
aggression of the trusts will result in practical mo- 
nopoly of the important business of the country." 

As a result of the subsequent enforcement of this policy 
the monopolies created by secret and preferential rates for 
railroad transportation were successfully assailed in the Cir- 
cuit Court of the United States at Chicago and Kansas < lity 
in suits in equity begun by the United States to enjoin 
against the violation of law prohibiting rebates and dis- 
criminations, and for the first time establishing the right of 



12 

the Attorney-General to appear for large numbers of people 
and sections of the country affected by a remedial law, a 
right which has since been made doubly certain by a statute 
enacted at the suggestion of this same Attornev-General. 

No Constitutional Amendment Required. 

At the inception of this governmental crusade against 
corporate abuses, it was contended by many eminent states- 
men and jurists throughout the country that the cure hy 
only through the channel of constitutional amendment — a 
process so cumbersome, remote and uncertain that the very 
thought suggested dangerous delay, if not utter despair. 

But doubt was dispelled and confidence created when the 
Attorney-General, whom the President and the people had 
come to look upon as their guiding genius through the wil- 
derness of constitutional confusion, said in that same ad- 
dress : 

"If the Sherman Act exhausts the power of Con- 
gress over monopolies, the American people find them- 
selves hopelessly impotent, facing a situation fraught 
with the most alarming possibilities with which neither 
the Federal nor the State governments can deal. 

"Can it be possible that the people of the United 
States, feeling the pressure of undoubted evils, are 
nevertheless totally powerless? Is it true that, al- 
though they know the nature of the wrong and are 
seeking a remedy, the Constitution, os it stands, does 
not permit them to pursue it ; that amendment to that 
charter is first necessary ; that the power of Congress 



I.'. 

does not now extend over detriments injuring the en 
tire body of citizens in their most vital concerns be- 
cause these detriments originate in th< I do 
not believe we find ourselves so helpless. When the 
currents of monopoly evil flow out over state lines and 
cover the country, not only entering but largely filling 
the channels of interstate and foreign trade, it will not 
do to say that the evil is beyond the national reach." 

"It would seem monstrous to urge that ( and 

the executive under its authority are powerless and must 
sit idly by and see the channels of interstate commerce 
made use of to the injury of the people by monopolistic 
combinations." 

Won Confidence of the Country. 

That the confidence of the country was centered in the 
Attorney-General as a result of his apparent mastery of the 
situation was illustrated two months later at the opening of 
the Fifty-Seventh Congress, when he was asked by the late 
lamented Senator Hoar, Chairman of the Judiciary Com- 
mittee of the Senate, and the Honorable Charles E. Little- 
field, Chairman of the sub-committee of the judiciary of the 
House of Representatives, to forward to these comn 
"Any suggestions that your reflection and experience shall 
suggest as to what further trust legislation may be desir- 
able." 

And it was in reply to these requests that he furnished 
the bold and sweeping suggestion : 

"That as a first step in a policy to be persistently 
pursued until every industry, large and small, in the 



14 



country can be assured of equal rights and opportuni- 
ties, and until the tendency to monopolization of the im- 
portant industries of the country is checked, that all 
discriminating practices affecting interstate trade be 
made offenses to be enjoined and punished." 

In Harmony With President. 

In the great railroad rate struggle the harmony of pur- 
pose existing between the President and the Pennsylvania 
Senator is revealed in the statements made by Mr. Justice 
Moody, then Attorney-General, on October 29, 1906, in a 
speech delivered in the Academy of Music, Philadelphia, in 
which he said : 

"I think it Providential that your great citizen (Mr. 
Knox), became Attorney-General, and I also think it 
was Providential that you withdrew him and put him 
in another place. For no man was more potential in 
the framing of that law than the Junior Senator from 
Pennsylvania. None stood more firmly at the back of 
President Roosevelt, and I wish to say now that in 
every principle of law involved in that bill there was 
not an iota of difference between Senator Knox and 
myself." 

• 

Results of a Great Speech. 

The far-reaching influence of the speech delivered by Mr. 
Knox, at Pittsburg, on November 3, 1905, in which he out- 
lined the administration's policy and blazed the way for the 
legislation necessary to crush the evils aimed at in the legis- 
lation that followed was attested in the closing - debates on 



16 

the Rate Bill when Senator Dolliver, referring to the Penn 
sylvania Senator and the greal service the latter had ren- 
dered, said : 

"In drafting this bill, the framers of it were guided 
very largely by the speech delivered at Pittsbui 

the Honorable Senator from Pennsylvania (Mr. 
Knox), a speech which reads almost like a judgment 
from the Supreme Bench." 

Remedial Legislation Recommended. 

It was Attorney-General Knox who, in 1902, recom- 
mended that in respect to railroad rebates, a penalty should 
be imposed upon the incorporated carrier and the beneficiary 
alike, and that the rights of the courts to restrain such prac- 
tice at the suit of the United States should be provided for 
in new legislation. He recommended that it should be made 
unlawful to transport traffic by carrier subject to the "Act 
to Regulate Commerce" "at any rate less than such car- 
rier's published rate," and that all who participated in the 
violation of such law should be punished. 1 le recommended 
that comprehensive plans should be framed to enable the 
government to secure all the facts hearing upon the organi- 
zation and practice of concerns engaged in interstate and 
foreign commerce essential to a full understanding th. 
He recommended the act to speed the final decision of cases 
under the anti-trust law. 

And what is more gratifying to his friends and the people 



10 

than the recommendations which he made is the fact that 
they were promptly acted upon and became laws before the 
expiration of that session of Congress. 

Speedy Justice Secured. 

The Act to expedite the hearing and determination of 
suits under the anti-trust and interstate commerce acts was 
passed February u, 1903. Under its provisions the North- 
ern Securities case was set down for argument before the 
circuit judges of the Eighth Circuit, and argued in March, 
1903. 

New Department Established. 

On February 14, 1903, the Department of Commerce and 
Labor was created, and in that department the Bureau of 
Corporations established, completing the government's 
power to make investigation into the organization, conduct, 
management and business of all corporations engaged in 
interstate and foreign commerce. 

Interstate Commerce Law Amended. 

Along the line of his suggestions already indicated, and 
pursuant to others which he made, Congress also amended 
the interstate commerce law by providing that anything done 
or omitted to be done by a corporate common carrier subject 
to the Act, which if done by an employee thereof would con- 
stitute a misdemeanor under the law, should also be held 



17 

to be a misdemeanor committed by such corporation; and 
furthermore, conferring jurisdiction upon the Circuit Courts 

of the United States to restrain by writ of injunction, or 
other appropriate process, departures from published rate-. 

or any discriminations forbidden by law; requiring < 
common carrier subject to the Law to publish his tariff rates 
or charges, and to maintain them; making it unlawful for 

any person or corporation to offer, grant, or give, or to 
solicit, accept or receive any rebate, concession or discrimina- 
tion in respect to the transportation of any property in inter- 
state or foreign commerce, whereby such property shall by 
any device whatever be transported at a less rate than the 
rate published by the carrier; and also making the rate 
published and filed with the Interstate Commerce Commis- 
sion the legal rate. 

It further provided that a prosecution by the government 
under this Act should not exempt the offending carrier from 
suits to recover damages by parties injured. 

It provided also for the production of all books and pa- 
pers, both by carrier and shipper, which directly or indirectly 
relate to the transactions, and the giving of testimony, 
whether such documents tend to criminate the party or not. 

Non-Partisan Testimonial. 
Regarding this constructive legislation, the non-partisan 
Interstate Commerce Commission has declared that : 



18 



"Without further reference to the changes made by 
this amendatory legislation, the Commission feels war- 
ranted in saying that its beneficent bearing became evi- 
dent from the time of its passage. It has proved a 
wise and salutary enactment. It has corrected serious 
defects in the original law and greatly aided the attain- 
ment of some of the purposes for which that law was 
enacted. * * * 

"Indeed, it is believed that never before in the rail- 
road history of this country have tariff rates been so 
well and so generally observed as they are at the present 
time." 

The inseparable identification of Mr, Knox with all these 
measures is proven not only by the recommendations which 
he made from time to time, but by the fact that he prepared 
bills embodying every idea in the legislation enacted for the 
correction of the evils over which the government has gained 
such a signal and splendid triumph ; and as a sample of the 
manner in which these bills were treated, it is not amiss to 
state that Mr. Knox's amendment to the Interstate Com- 
merce Act, relating to departures from freight rates "pub- 
lished by the carrier" was inserted by Mr. Elkins with the 
change of but a single word, and is now the most vital part 
of that splendid piece of legislation. 

Beef Trust Broken. 

In the meanwhile, the Department of Justice, under his 
administration, branded as outlaws the combinations of in- 
dependent corporations to fix and maintain extortionate 



lit 

prices of meats and drove them, when confronted with over- 
whelming evidence of guilt to the shelter of a demurr< 
prevent the publicity of the evidence collected by the govern- 
ment. 

His arguments in and personal management of 'he many 
other great cases which had to do with the testing of laws 
then upon the statute books are too familiar to this body and 
the people at large to require recounting here, but it is mani 
fest that from the very inception of the crusade againsl 
those evils which were crushing competition, throttling 
trade, 'and gradually placing not only the great products of 
the country, but the markets in which they were bought and 
sold, and the channels of commerce through which they were 
reached, under the control of evil combinations, which inso- 
lently began to defy the government itself the one staunch 
and sturdy figure who stood unflinching through all the 
struggle, inspiring confidence in his Chief, and bringing vic- 
tory to his people was the great Pennsylvania statesman of 
whose character and achievements the nation is justly proud. 

Record Ratified by Roosevelt. 

In the light of this splendid record it is not difficult to 
understand the earnestness with which Theodore Roosevelt 
declared on October 4, 1906, that — 

"During the last few years the National Government 
has taken very long strides in the direction of exercis- 
ing and securing this adequate control over the great 



20 

corporations, and it was under the leadership of one of 
the most honored public men in our country, one of 
Pennsylvania's most eminent sons, the present Senator 
and then Attorney-General, Knox, that the nezv depar- 
ture zvas begun/' 

It is also manifest from that which I have already related, 
that his argument in the Northern Securities case before the 
Supreme Court, in which he won that memorable victory, 
while of the gravest importance to the nation, was but a 
mere incident attendant upon the great labor he was per- 
forming in outlining and establishing upon an everlasting 
foundation policies that were and are as vital to the mainte- 
nance of the government as any that have ever challenged 
the attention of the nation since it was first established. 

Safety Appliance Law Rescued. 

Nor was his victory over the Beef Trust in the least de- 
gree more important or far-reaching in its consequences 
than was his bold and ingenious move when for the first 
time in the Nation's history he asserted the right of the 
government to intervene in a private damage suit as a result 
of which the defeat of an humble workman, who had sued 
the Southern Pacific Railroad under the Safety Appliance 
Act, was turned into a victory, and the constitutionality of 
that law fraught with such importance to the traveling pub- 
lic, and the great army of railway employes throughout the 
country, was vindicated and sustained. 



1M 

Peonage Prosecuti i> 

Similarly bold in the initiative and similarly successful 
in the execution was the first prosecution ever instituted 
under the Peonage laws of the United States outside of the 
Territory of New Mexico, when in 1901 this same Attorney- 
General caused the indictment and conviction of those who 
sought to re-establish a species of slavery, which was doubly 
vicious because it based its right to exist upon the law itself. 
This practice of holding poor, ignorant, defenseless negroes 
in involuntary servitude, as a result of the connivance of 
corrupt magistrates and selfish speculators was ended, and 
in the language of a Federal Judge, ''The law has been 
thoroughly vindicated and the evil against which it was di- 
rected has been completely crushed." 

Law Triumphs Over Lotteries. 

During his administration also the power of Congress 
under the commerce clause of the Constitution to prohibit 
the carriage from state to state of obnoxious subjects of 
traffic was affirmed by the Supreme Court, and the vicious 
lottery system made a thing of the past. 

Alien Anarchists Deported. 

The right of the Immigration officers under the authority 
of Congress to detain and deport alien anarchists seeking 
entrance into the United States was upheld by the same 
court, and during his administration the Chinese exclusion 



22 

act was defended against renewed attacks upon its constitu- 
tionality. 

The efficiency of the postal system was advanced by de- 
cisions upholding the power of the Postmaster-General to 
exclude from the mails matters relating to fraudulent 
schemes and lotteries; likewise the constitutionality of the 
so-called oleomargarine law was successfully defended, and 
the interests of the farmers of the country so materially 
advanced. 

Land Frauds Prosecuted. 

The fraudulent acquisition of public lands and the unlaw- 
ful cutting of timber thereon were prosecuted with success. 
Under the law giving the Attorney-General the right to em- 
ploy special counsel in special cases the work of Heney was 
begun and continued under Attorney-General Knox in the 
face of the most influential opposition. 

Postal Frauds Prosecuted. 

It would be difficult to describe a more important work 
and a more gratifying result than that accomplished by the 
Department of Justice during this same Attorney-General's 
administration in the ferreting out and successful prosecu- 
tion of those guilty of the gross frauds in the Post Office 
Department. The prosecutions instituted and the punish- 
ments that followed in these cases were in themselves suffi- 
cient to make his administration of that office more than 



23 

ordinarily notable, and it is safe to say that no Other pi 
tions ever had a more far-reaching influence in driving dis- 
honesty from the public service and impressing upon public 

officials the heinous character of the offense that has its 
beginning in the breach of a public trust. 

The Pacific Cable. 

The satisfactory solution of the many problems submitted 
to his department in connection with the establishment of 
the Pacific cable resulted in an arrangement more favorable 
to the United States than that enjoyed at the same cost by 
any other government with reference to any other cab 
the world. Not only was the commercial public protected 
by a provision guaranteeing reasonable rates, but the gov- 
ernment messages are transmitted at rates fixed by the gov- 
ernment itself, and in time of war its exclusive use by the 
government is conceded and granted. 

In addition to all these features the government may take 
title to it at any time it wishes upon a valuation to be fixed 
by arbitrators chosen in the usual way. 

In realms in which possibly no other statesman who ever 
held the office of Attorney-General of the United States was 
called upon to assert himself in critical emergencies, the 
same great intellect proved its capacity to immediately grasp 
and control the situations with which it was confronted. 



24 

Gaynor and Greene Extradited. 

In the famous cases of Gaynor and Greene, charged with 
the embezzlement of large sums of money in connection 
with the Savannah Harbor contracts, when they were cap- 
tured in Quebec, and conveyed to Montreal, in the fastest 
boat the United States Government could secure, and the 
attempt of this country to extradite them was temporarily 
thwarted by the Canadian Court, which rendered a judg- 
ment discharging the prisoners, and the controversy had 
apparently ended in defeat for our government, our Attor- 
ney-General taking issue with many of the greatest lawyers 
of his time, and acting in direct conflict with the opinion of 
Sir Edward Clark, the leader of the English Bar, directed 
an appeal to the Privy Council in London, as a result of 
which in February, 1905, that tribunal rendered a decision 
in favor of the United States, and for the first time estab- 
lishing the doctrine for which Attorney-General Knox con- 
tended. This later resulted in the extradition, trial and 
conviction of Gaynor and Greene, the story of which is too 
familiar to need recounting here. 

At one stage of this proceeding the Attorney-General was 
offered $600,000 to compromise the case, but he replied that 
the government did not need the money, but did need and 
intended to punish the defendants. 

Panama's Perplexing Problems. 
Ihe other instance in which the Attorney-General proved 



25 

his great capacity for great duties was the handling of all 
the intricate legal matters pertaining to the acquirement of 
the title to the Panama Canal. Probably no other greal 

undertaking in the world's history was attended in its in- 
fancy by the constant presentation of more intricate ques 
tions involving treaty rights, national and international obli- 
gations and the doctrine of private contracts, and all of them 

so intermingled and intertwined that it seems almost im- 
possible to conceive of the successful strategy and substantial 
safety with which every step was taken and every American 
object attained. 

An additional gratifying factor in connection with thi> 
incident was the fact that while matters of this magnitude 
have usually cost other governments sums reaching into mil- 
lions, in this case it was conducted solely by Attorney-Gen- 
eral Knox and his assistants, in this country, in Panama, 
and in Paris, at a cost to the United States Government of 
less than $4,000. 

A Fitting Reward. 

With this record to his credit, and with every line of it 
written into the history of his country, and with his splendid 
capacity proven for every great emergency, what m ►re pn 'tit- 
able act can his people perform with reference to their own 
welfare than to place him at the head of this great Republic, 
to which his heart has been so near, and to which his service 
has been so great ? 



Letter from Attorney General Ktiojc 
to Senator Hoar and 'Represen- 
tative Littlefield 

Department of Justice, 
Washington, D. ('., January 3. 1903. 
Hon. George F. Hoar, 

Chairman Committee on the Judiciary, 

( nited States Senate. 

Sir: I have the honor to acknowledge the receipt of your 
communication of Decemher 20, in which you state as fol- 
lows : 

"The Committee on the Judiciary will be glad to receive 
any communication you may be willing to make to them in 
relation to what are called trusts before proceeding to con- 
sider the various bills which are pending upon that subject. 
They will be glad to be informed as to what questions have 
been decided by the courts, what questions are pending in 
the courts, and any suggestions that your reflection or ex- 
perience shall suggest as to what may he desirable in the 
way of further legislation." 

I have the honor to submit, in response to this request, the 
following statements under the three heads which yon have 
indicated, namely: The questions which have been decided 



28 

by the courts, the questions which are pending in the courts,, 
and suggestions respecting further legislation. 

(After answering the first and second questions, Mr. Knox 
said) : 

III. 

SUGGESTIONS RESPECTING LEGISLATION. 

I come now to your invitation to communicate to the 
committee "any suggestion that your reflection or experi- 
ence shall suggest as to what may be desirable in the vvav 
of further legislation."* 

In view of the wide experience of the committee in deal- 
ing legislatively with legal and economic questions, I venture 
upon the line of suggestion with much hesitation and feeling 
that the utmost the committee desires in this respect is that 
some concrete thing be set down that may be considered, 
in connection with other views that may be presented as to 
what might be done within the short period allowed for 
consideration during the life of this present Congress. 

I think it proper enough to briefly premise such sugges- 
tions as I shall make for immediate action by a statement 
of some of the reasons upon which they art based. 

The end desired by the overwhelming majority of the 
people of all sections of the country is that combinations 
of capital should be regulated and not destroyed, and that 
measures should be taken to correct the tendency toward 



28 

monopolization of the industrial business of the country. I 
assume a thing to be avoided, even by suggestion, is legisla- 
tion regulating the business interests of the country beyond 
such as will accomplish this end. 

In my judgment, a monopoly in any industry would be im- 
possible in this country, where money is abundant and cheap 
and in the hands or within the reach of keen and capable 
men, if competition were assured of a fair and open field 
and protected against unfair, artificial and discriminating 
practices. 

Two or more persons or corporations can not by any 
combination or arrangement between themselves either con- 
tract or expand the rights of others to engage in a similar 
business. The utmost they can do is to discourage the dis- 
position to do so by restricting the opportunities, or by se- 
curing to themselves some exclusive facilities or the enjoy- 
ment of some common facilities upon exclusive terms. 

If the law will guarantee to the small producer protection 
against piratical methods in competition and keep the high- 
ways to the markets open and available to him for the same 
tolls charged to his powerful competitor, he will manage to 
live and thrive to an astonishing degree. 

Individualism in production has its advantages as well as 
combination. Small individual enterprises not uncommonly 
spring up and thrive within the shadow of the larger ones, 
though enjoying none of their supposed advantages of con- 



30 

trol of sources of raw material, fuel, and transportation facil- 
ities, yet realizing large profit per ton of output because of the 
closer economies possible through direct, personal, interested 
management. Indeed, it is true that the great concerns 
whose stocks have been gathered in by the holding com- 
panies (the real trusts) are themselves largely but aggrega- 
tions of successful smaller ones which, one by one, have 
made their competition so severely felt by an ambitious rival 
that he has absorbed them. 

I believe the rebates and kindred advantages granted by 
carriers to large operators in the leading industries of the 
country, as against their competitors, in many years amount- 
ed to a sum that would represent fair interest upon the 
actual money invested in the business of such operators. 

If substantially all of a given business is controlled by 
one company, the more threatening to potential competition 
does this iniquity become, and with greater timidity does 
such competition approach the field. 

In some respects the holding company is weaker than its 
independent rivals. It pays as much, if not more, for labor. 
Advantage in the saving of an intermediate profit upon raw 
material and fuel is largely offset by the enormous cost of 
the sources of supply represented in high capitalization. 

This capitalization, in almost every case of a holding com- 
pany, represents far more than the aggregate intrinsic value 
of its constituent companies. The method of computing values 



for purpose of concentration has invariably been upon • 
ing power, and rebates have Frequently swelled earninj 
that enormous volumes of capital stock represenl nothing 
but unfair advantage obtained over rivals. 

The situation is much improved in respect to transporta- 
tion discriminations within the last two years. This is the 
result, first, of a determined effort upon the part of the 
Government to apply existing laws in an effective way 
against discrimination; and second, to the fact that some of 
the higher-minded railroad managers of the country have 
exerted their large influence in the direction of equitable 
dealing with the shippers of the territory which they serve. 
Whether it is a consequence of these influences or a mere 
coincidence, it is nevertheless stated on high authority to be a 
fact that the embarkation of new capital in enterprises 
competition with the supposedly controlled industries within 
the period named probably equals the capital of the trusts. 
The effect of certainty of protection against predatory com- 
petition can be safely prophesied to increase this figure. 

The country is filled with men whose lives have been 
devoted to industry, who have developed and made profita- 
ble the properties now possessed by the trusts at prices far 
in excess of the cost of modernized duplicates, who will not 
long remain idle when assured that their capital and ex- 
perience can be securely employed in the business to which 
they were trained. 



32 

Too much has been conceded in public discussion to the 
trusts in this respect. Organizations in one State to control 
production in other States of commodities consumed in all 
the States are as a rule devices of shrewd men to capitalize 
for their own benefit the country's prosperity. They are be- 
gotten in prosperous times. Poor times offer no induce- 
ments. They are essentially different from the combinations 
effected by producers, of their own motion, for economic 
reasons. Those which have been recklessly conceived con- 
tain within themselves the germ of their own undoing. They 
have, as a rule, only acquired the ownership of the stocks of 
the industries of the country which had already attained 
their gigantic stature. Their existence does not increase the 
productive capacity of the country, except as high prices 
of products have stimulated competition, nor have they be- 
cause of their existence increased demand as the demand 
for products has never been thought to depend upon the 
title to capital stocks of producing companies. 

My suggestion, therefore, is "that as a first step in a policy 
to be persistently pursued until every industry, large and 
small, in the country can be assured of equal rights and op- 
portunities, and until the tendency to monopolization of the 
important industries of the country is checked, that all dis- 
criminatory practices affecting interstate trade be made 
offenses to be enjoined and punished." Such legislation to 
"be directed alike against those who give and those who re- 



33 

ceive the advantages thereof and to cover discrimination in 
prices as against competitors in particular localities resorted 
to for the purpose of destroying competition in interstate 
and foreign trade, as well as discrimination by carriers. 

Such practices are so obviously unreasonable thai to 
inhibit them would be a measure of regulation of commerce 
to keep it free and unrestrained and not an attempt t 
ercise arbitrary power. Such legislation, to certainly reach 
producers guilty of practices injurious to national and inter- 
national commerce, should, in my judgment, take the form 
of penalizing the transportation of the goods produced by 
the guiltv parties, and the Federal courts should be given 
power to restrain such transportation at the suit of the 
Government. 

It may be said that under the "Act to regulate commerce," 
a shipper may be punished for receiving rebates or special 
rates less than the lawful published rates; and that it is 
unnecessary to provide additional legislation in this respect 
to curb trusts, monopolies, and combinations. This, how- 
ever, is an erroneous statement. 

. Whatever the Congress may have designed in the act t< 
regulate commerce regarding the punishment of shippers 
for participation in violation of that act. as construed by the 
courts, their punishable offenses fall under two heads: 

First. Where the shipper has solicited or participated in 
instances of unjust discrimination, and 



34 

Second. In cases of fraud perpetrated by him against the 
carrier, ex. gr., by false representation of the contents of 
a package. 

As to the first, the courts have held that to constitute un- 
just discrimination it is necessary to prove that at the time 
the lower unlawful rate was being' granted to the favored 
shipper, the higher lawful rate was imposed against another 
shipper on like commodities between the same points. 

In many cases of departure by a carrier from its published 
tariffs, the favored shipper has enjoyed his advantage for 
so long a time that all rivals have disappeared. In such 
cases, and they are the most numerous, no illegal discrimina- 
tion exists ; consequently the recipient of the unlawful rebates 
escapes the penalties of the act to regulate commerce. 

The act prohibits the carrier from charging anyone a 
greater or less rate than the rates named in its schedules; 
but the penalties provided therefor have been held by the 
courts not to be applicable to any carrier that is an incor- 
porated company. 

The officers or agents of such incorporated company, who 
grant the rebate or make the unlawful concession in rates, 
are subject to indictment and punishment. That, however, 
is generally an impracticable remedy, because the agent who 
makes the concession is usually the only person by whom it 
can be ascertained that the rebate has been paid; and when 



35 

he has testified in relation to the matter he has thereby 
obtained amnesty from prosecution. 

Even if the corporation and its officers could be effectively 
reached by criminal proceedings, the law leaves unrestrained 
the persons, corporations, and combinations who arc bene 
ficiaries of the unlawful rebates. 

This casus omissus of the act to regulate commerce sin mid 
be supplied by imposing a penalty upon the incorporated car- 
rier and beneficiary alike, and the right of the courts to 
restrain such practices at the suit of the United State-, a 
right not settled and now vigorously challenged, should be 
made certain. 

I think the operation of such an act should be limited to 
the transportation by common carriers subject to the act 
to regulate commerce. This is necessary for the reason 
that there is no requirement of law that rates shall be pub- 
lished by common carriers, except by railroad, or railroad 
and water carriers acting as one line. When the act to 
regulate commerce was under consideration it was deemed 
impracticable if not unwise to attempt to regulate the rates 

of water or other common carriers. It was underst 1 that 

in the nature of things water rates could not be stable. 

In addition to that it was believed that water competition 
must be unrestricted. As it is the least expensive means 
of transportation, it, wherever it could directly or indirectly 
compete with carriers by rail, would, approximately, furnish 



36 

a basis for rates by railroad, and measurably keep such rates, 
within the limits of extortion. 

So that if provision is made by law to prevent rebates, a 
standard or established schedule must be referred to ; and 
as the admitted abuse of magnitude has been in the favors 
granted by railroad companies, their rates, which the law 
requires shall be made public, should be taken as the rates 
which must be adhered to and made equal to all the people 
under similar conditions. 

It should, therefore, be made unlawful to transport traffic 
by carriers subject to the "act to regulate commerce" at any 
rate less than such carriers' published rate, and all who par- 
ticipate in the violation of such law should be punished. 

An additional provision should be made to reach corpora- 
tions, combinations, and associations which produce and 
manufacture wholly within a State, but whose products or 
sales enter into interstate commerce. It should relate, first, 
to such concerns as fatten on rebates in transportation, and, 
second, to concerns which sell below the general price of a 
commodity in particular localities, or otherwise in particular 
localities wantonly seek to destroy competition. These could 
be excluded with their commodities, products, or manufac- 
tures from crossing State lines. 

As the power of Congress over interstate commerce is 
plenary, excepting as it may be limited by the Constitution,, 



37 

it is believed that it may impose such a punishment for the 

violation of the public policy of the nation. 

A comprehensive plan should be framed to enable the 
Government to get at all the facts bearing upon the organi- 
zation and practices of concerns engaged in interstate and 
foreign com'merce essential to a full understanding th< 
and to compel the observance of the law. This should be 
framed upon tested lines. 

A commission should be created to aid in carrying out 
the provisions of the Act of July 2, 1890, and any further 
legislation relating to commerce. It should be the dul 
such commission, among other things, to make diligent in- 
vestigation into the operations and conduct of all corpora- 
tions, combinations, and concerns engaged in interstate or 
foreign commerce, and to gather such information and data 
as would enable it to make specific recommendations for ad- 
ditional legislation for the regulation of commerce, and 
annually, and oftener if it shall seem needful, to make repi ti 
thereon to the President. 

Such a commission should have authority to inquire into 
the management of the business of such corporations and 
concerns, to keep itself informed as to the manner and 
method in which the same is conducted, and to obtain from 
such concerns full and complete information necessary to 
enable the commission to perform the duties and carry oul 
the objects for which it is created; it should have (he power. 



38 

when in its judgment it is necessary, to require reports from 
them and to require from them and their officers, agents, 
and employees specific answers to all questions upon which 
the commission needs information. As there are no means 
now provided by law for compelling testimony, such a law 
should provide that no person should be excused from at- 
tending and testifying or from producing books, papers, con- 
tracts, and documents before such commission or the courts. 

Of course, the general scheme of legislation to correct 
trust abuses should be developed with great care, for it is 
not nearly so important to act quickly as to act wisely. 
Primarily, the question of the power of Congress to reach 
what the Sherman Act seems to have missed should be 
authoritatively determined,, as upon that proposition the 
whole structure of effective regulative legislation must rest. 
We should at once take the first steps by a law aimed at what 
we certainly know to be unreasonable practices directly re- 
strictive of freedom of commerce upon which the funda- 
mental question can be raised, and by a law conferring upon 
the Government a general supervisory power as above out- 
lined. 

Another step in legislation which I earnestly recommend, 
and which will, if enacted, greatly hasten a solution of the 
pr< ililem, is that an act be passed as soon as possible to speed 
the final decision of cases now pending and others that may 
be raised under the anti-trust law. I refer to an act to 



39 

enable the Attorney-General to secure the original hearing 
by a full bench of the circuit judges in the circuit wherein 
is pending any suit brought by the I faited States under the 
anti-trust law which the Attorney-General certifies to the 
court to involve questions of great public importance, and 
giving an appeal from their decision directly to the Supreme 
Court of the United States iri*such cases, and also giving an 
appeal directly to the Supreme Court in all pending cases 
in which the United States is a party which have been heard 
and are as yet unappealed. 

There are a number of cases now provided by statute 
where appeals may be made directly to the Supreme Court 
from the district and circuit courts, namely, in cases in which 
the jurisdiction of the court is in issue, from final sentences 
and decrees in prize cases, in cases of conviction of a capital 
or otherwise infamous crime, in cases that involve the con- 
struction or application of the Constitution of the United 
States, in cases in which the constitutionality of any law of 
the United States, or the validity or construction oi any 
treaty is drawn in question, and in cases in which the con- 
stitution or law of a State is claimed to be in contravention 
of the Constitution of the United States. 

The class of cases that I suggest should be brought within 
this rule, it seems to me, is of as great importance as any 
of those referred to. The suggested provision requiring a 
full bench of the circuit judges would insure the cases 



40 

ceiving as full consideration before presentation to the Su- 
preme Court as if heard by the United States Circuit Court 
of Appeals. 

It is too much to say that with these gaps closed the 
scheme of governmental regulation will be complete ; but it is 
clear that without some similar legislation it would continue 
to be inadequate. And such legislation will make a long, 
first stride in advance. 

Very respectfully yours, 

P. C. Knox, 
Attorney-General. 



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